PARTY

COSATU slams Eskom tariff discounts to the rich

Patrick Craven |

10 March 2010

Union federation says parastatal should be compelled to make tariffs public

The Congress of South African Trade Unions is shocked and disgusted at the revelation in the Cape Times on 10 March 2010 that "Eskom has secret deals with 138 big companies that pay dirt-cheap prices for electricity".

The average cut-price for these companies, which use about 40% of South Africa's electricity, is around 17c per kilowatt hour (kWh). But for some the tariff could be as low as 9c/kWh. This compares to the + 80c/kWh that households and small businesses will have to pay once Eskom's price hikes are implemented.

Eskom has even confirmed that about 10 of these 138 big customers, which had negotiated deals with Eskom in the apartheid era, were not subject to any tariff escalations at all!

Even more scandalous is the admission that "the special deals are considered by Eskom to be so secret that they were not revealed to the National Energy Regulator of SA (Nersa) in the utility's recent application for tariff increases".

This confirms COSATU's belief that the NERSA decision was a rubber stamp which the regulator made without hearing from Eskom the full extent of their existing or proposed tariff policy!

In addition neither the parliamentary committees on energy and public enterprises, nor the Department of Energy are privy to the details of Eskom's deals. The director-general of the Department of Energy, Neliswe Magubane, when asked in parliament what percentage of electricity was sold to industry at a price of between 6c and 9c/kWh, and whether these agreements would be revised, she replied that the cut-price electricity was a contractual arrangement between Eskom and the companies and that Eskom had told the department it could not reveal the prices because of "commercial sensitivity".

This news will make COSATU more determined than ever to mobilise its members and the broader civil society on to the streets in protest at the Eskom tariff hikes. It is absolutely outrageous that a publicly owned utility can hide such important information behind the cover of "commercial sensitivity".

Nationalised public services must not be run on the same corrupt and secretive way that the private sector operates. The government must demand that all Eskom's tariffs be made public and if necessary legislate to compel the board to come clean.

This shocking news has also totally vindicated the federation's view that tariffs are a grossly retrogressive way of raising the money that Eskom need for new generating capacity. It proves that the additional money should come from a tax on the rich, so that the poor are protected from the crippling burden which Eskom wants to impose on them.